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Costs Of Health Care Have To Shrink

Indian health care system is characterised by rising health care costs, as well as gaps in quality, safety, equity and access

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Indian health care system is characterised by rising health care costs, as well as gaps in quality, safety, equity and access. Health care cost increases continue to outpace rise in wages, inflation, and economic growth. One approach to containing the growth of health care costs is to improve the efficiency of the health care delivery system. The Indian healthcare system is primarily characterised by a rural and urban divide. There has been a wide gap between the rural and urban healthcare systems in India, which worsens the problem to a great extent. An effective payment mechanism, with the rising burden of health care costs, the out-of-pocket expense of the population, is very high compared to other developed countries. Health insurance penetration is still very low, but the good news is that it has been increasing over the years. Our country also faces an acute need to fill in the gaps between primary and secondary healthcare infrastructure. For primary healthcare, the government only spends about 30 per cent of the total healthcare budget allocated , which is abysmally low compared to countries like the US or the UK. The only way to solve this problem is to address infrastructure issues, such as building rural clinics, ensuring availability of primary health workers, developing IT systems and ensuring medical supplies, including medicines, at an affordable cost. The cost challenges can also be addressed by eliminating or reducing middlemen in the supply and procurement efficiency. This approach would allow finite health care resources to be used in ways that best support high-quality care.

Government and state policy makers, private players and systems leaders are seeking ways to reduce waste, increase the efficiency of healthcare delivery and allocate resources to improve value in health care. Before deciding the quality improvement programme that a hospital may be able to successfully implement, hospital administrators and policy makers may first want to assess the maximum potential gains that could be achieved by reducing inefficiency. Is there a method whereby the level of inefficiency at hospitals can be quantified? In general terms, efficiency and quality are characterised by care that is safe, timely, effective, efficient, equitable and patient-centric.

Many health inequities result from a broad set of social, economic, and political conditions which influence the level and distribution of health within a population. Redressing any inequities in health can be considered a primary goal of public policies, with health systems having a specific and special role in achieving equity alongside efficiency, in the distribution of health in a population and the exposure and vulnerability to ill-health.

The efficient allocation of resources between different levels of services and between different geographical regions is critical in ensuring the physical availability of the appropriate level of adequately resourced health services. In India, this challenge is compounded by low levels of public financing with marked state variation in financing.

The medical devices sector is the smallest piece of India’s healthcare pie. However, it is one of the fastest-growing sectors in the country, like the health insurance marketplace. Till date, the industry has faced a number of regulatory challenges, which have prevented its growth and development.

Recently, the government has been positive about clearing regulatory hurdles related to the import-export of medical devices, and has set a few standards around clinical trials. The medical devices sector is seen as the most promising area for future development by foreign and regional investors; they are highly profitable and always in demand in other countries. The government focus on the medical devices sector can certainly address some bigger challenges in the overall healthcare industry.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.




Vivek Tiwari

The author is founder & CEO, Medikabazaar (Boston Ivy Healthcare), an online medical supplies ecosystem

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